Climate Wars provides a concise coverage of the history of Climate Change politics in Australia and offers a plan for the future.
“Australia has a strong culture of intergenerational equity - making sure our children / grandchildren aren’t left to foot the bill for things we knowingly neglected to deal with ourselves.”
Such statements underlie the intention to provide policy and direction to help address Climate Change. Climate Wars presents a historical narrative that sets the stage for policy going forward.
The book presents lots of facts across the spectrum of Climate Change, and provides a good story on climate change and politics within Australia during the last two decades and clearly articulates the local political arguments put forward for and against.
The book is too focused on the Liberal Party’s inaction what they won’t do in the future. I think it should have taken more of a positive tone on the premise that when Labor returns to power then this is the plan of what Labor will do for the Nation.
The early chapters of the book address the history of climate change politics and the later chapters look at what Labor plans to do to address one of the greatest challenges ahead of this Nation.
As well the history and current government policies on Climate Change, Climate Wars briefly covers some of the policies on Climate Change in other countries and the actions culminating in the Paris agreement. Particular emphasis is given to the UK, and its recent bipartisan agreement on the carbon budget. By 2025 the UK, birthplace of the post-industrial coal industry, will be coal power free.
Comparisons between other countries and Australia throughout the book provide an idea of what is possible in addressing Climate Change sector by sector. For example, the setting a floor price on carbon permits for electricity generation. Canada recently ruled that all Canadian provinces are required to have a price on carbon by 2018, compliant with national floor price of $10/tonne (which ratchets up each year to $50/tonne).
Butler describes the “Australia Clause” in Kyoto protocol, which allows reductions in land sector emissions to be counted towards Australia’s commitments. However, the book notes that recent land cleared in QLD included land that was accounted for in the Kyoto protocol!
The Paris agreement and Climate Change framework are detailed, and provides clarity on such gems as the example of a country that only takes responsibility for emissions produced within its borders – so what happens to all the emissions produced on the high seas? Where are they counted?
An interesting point was that the Paris agreement includes a 5-yearly ratchet mechanism, starting in 2018. If Australia is failing to meet its current commitments, how are we going to handle more serious cuts to carbon emissions?
One exciting prospect, noted in the book, is that the Paris agreement opens a global market for carbon credits in 2020. This means that Australians can sell not just buy carbon credits. Does this mean we get a carbon trading market in spite of the current Federal government? This is called the “Sustainable Development Mechanism” (and replaces Kyoto units).
The book explains that rich nations should aim to be producing ‘Net Zero Emissions’ by 2050 and that any carbon pollution by then will need to be offset by measures such as carbon sinks in the land sector or abated though technology like Carbon Capture Storage (CCS) and notes that Federal Labor and NSW Liberal governments have committed to this. Butler discusses that the Land and Agriculture sectors present the largest opportunity to capture carbon pollution, through methods such as soil carbon sequestration, and afforestation. However, it also notes, Australia is one of the very few (and most prominent) developed nations still producing net emissions from the land sector.
The book details the recently popular term in the media, “Clean Coal” (HELE technology) and CCS. Their shortcomings are covered well, and one interestingly notes that the COAL21 fund (provided to research CCS) was not only was used to promote coal use in Australia and overseas, but it was also used to finance advertising campaigns and political polling – not the usual use of research funding!
Climate Wars is endowed with interesting facts, such as the average consumption during 2007-2015 decreasing by over 20% through energy efficiency, but energy retail prices increased by 100%. The poor performance Australia has shown in Energy Efficiency gets a mention, including historical reversal in programs including: Victoria’s plans to reduce electricity consumption through greater energy efficiency were reversed to ‘fatten the pig’ for the utility sale, and that WA government wound-back the state’s efficiency programs as they were eating into the state-owned generator’s profits. I like the idea proposed that there needs to be an obligation to disclose property’s energy efficiency rating to potential buyers/tenants.
I found some of the interesting terms used in the book that included:
“Carbon leakage”: price on carbon pollution forces local operations to close and to be replaced by product made elsewhere.
“Tragedy of the Commons” – which is the economic concept describing the challenge involved in trying to manage the sustainability of a common – or shared – resource when self-interest drives the individuals who have access to the resource to get as much out of it as they can.
“Dutch Disease” – Where a boom in one export industry (e.g. mining) forces up local currency and wages, therefore hurting competitiveness of import-competing industry (local manufacturers).
Climate Wars provides a good background into the “gold plating” of the electricity network that affected electricity prices in recent years. I will reproduce some of it below. In the early 2000s average household consumption of electricity rose by 10% as air conditioners rose from 1/3 to 2/3 of households, which increased pressure on the electricity networks. The nature of air conditioner use is that households tend to be switch on appliances at same time, giving a great peak/spike in electricity load to the network. This led to greater investment to peaking plants and, more importantly, to an increased number of blackouts. The public backlash led policymakers to push for greater reliability in the network. These are similar to calls from the current Federal government following recent SA power outages. This in turn led to “gold-plating” – This is excessive amounts of capital dedicated to upgrading the poles and wires of the National Electricity Market (NEM). In some states, the network asset values doubled! Pricing arrangements for monopolies allowed them to recover all these costs from consumers plus a healthy profit margin. Nelson (AGL) stated that “policy makers overreacted to reliability and security of supply concerns by implementing measures that allowed electricity networks to overspend relative to what was required”. The Network is now a quarter of the power bill. Fascinating stuff!
The book mentions the deficiencies of the current setup for the NEM. The author’s consultation noted a broad l consensus that “there needs to be a clear plan to modernise the electricity sector” and that the current structure and rules of the NEM are no longer fit for purpose. It also mentions one of my pet peeves, that neither the NEM objective nor its rules reflect the 3rd driver of modern electricity policy – the imperative of decreasing carbon pollution.
Climate Wars notes that Climate and energy policy has been heavily dominated by debate on how to protect the competitiveness of those industries described as ‘emissions intensive, trade exposed’. It covers strategic domestic capability in these high emission industries and the need for it to be reflected in policy, for example, steelmaking, cement, aluminium and petroleum refining. I will leave it there about the strategic need for petroleum refining given the recent upsurge in Electric Vehicle (EV) use in other countries.
EV’s do get a mention, although briefly, with no real indication of Labor’s supporting policies for their rollout in Australia. Fuel efficiency standards do get a brief look, with the interesting fact that the Toyota Corolla in UK is twice as fuel efficient as the Australian model.
Climate Wars gives a good coverage of the recent and potential future of coal in Australia. Australia is the world’s largest exporter of coal, and interestingly, Qld is biggest supplier of coking coal, with Australia supplying 60% of the world demand. It also notes that half of coal exports are thermal coal and if long term price projections are correct, with 80% thermal coal exported the struggle over the future of coal is noted as primarily a struggle over thermal coal with the long term viability of many coal operations remaining in doubt. Specifically, the book states about Adani, that there is a very broadly held view that The Carmichael mine is simply not financially viable. However, Adani has its own port facilities and power stations that could take a hit on the mine to ensure supply.
The transition of the domestic power industry (particularly the thermal coal power stations) is importantly included in the book. It notes that around three quarters of NEM’s thermal power plants have exceeded their original design life. Taking a leaf out of Obama’s book, it suggests that there needs to be a more orderly approach to renewal of the nation’s electricity fleet. For example, Obama planned closures based on emissions intensity, and included the interesting fact from Sierra Club that since 2010, 240 out of 520 US Coal fired power stations have either been retired or had retirement dates announced.
It was good to see coverage of the history of gas industry that helps to give context to the historical politics and policies and a synopsis of the issues surrounding gas supply and demand. It noted that Australia is expected to become the largest exporter of LNG, and that Eastern Australia faces a gas shortage with rising prices there are gas industry assumptions that the Coal Seam Gas (CSG) yield estimates to satisfy Gladstone LNG operations were “heroic”. The book describes fugitive emissions (10% emissions and growing) from underground coal mines that are technically difficult and expensive to prevent. It notes that a carbon trading system needs to take fugitive emissions into account.
“The development of a stable, confident, renewable energy industry in this country has been patchy” – that can’t be restated enough. Climate Wars states that gas-fired power is an essential ‘bridge’ to a clean renewable energy future. The book notes that a modern electricity system with high levels of renewable energy is going to need to manage the intermittent nature of wind and solar power, and suggests this will be done in part by gas generators. Interesting facts on renewable energy include Australia’s cost advantage (capacity) on Wind and Solar compared with other countries. For example, Wind 45% capacity c.f. China’s 25%; Solar 20% capacity c.f. 15-16% in US & China. The book only gives a cursory look to Community Energy with the Community Power Network.
It was disappointing to see little on Climate Change Adaptation – this is an important part of addressing Climate Change and clear policy in this area could be paramount to an overall solution to this global issue.
Finally, it was great to see Newcastle included in the book: “Newcastle has become a centre of excellence in electricity networks and solar thermal technology”.
This book provided a great synopsis of the history of domestic politics in Australia on Climate Change, and gives us an insight to what a Federal Labor government can do to address the greatest challenge of our time – Climate Change.